Sotherly Hotels Inc. Q4 FY2024 earnings call

• Scott Kucinski reviewed Q4 portfolio operating metrics: RevPAR changes, impact of Tampa and Hurricane Helene. Highlighted strong results at DoubleTree Resort Hollywood, Whitehall Houston, DoubleTree Philadelphia, Hotel Ballast Wilmington. - Tony Domalski discussed total revenue, hotel EBITDA, adjusted FFO for Q4 and year-to-date, balance sheet details, and 2025 capital expenditures. - Dave Folsom noted portfolio's Q4 results, January RevPAR improvement, balance sheet initiatives, and continued optimism on lodging industry.

For Q4 2024, actual portfolio RevPAR increased 2.9% driven by 7% occupancy increase and 3.7% ADR decrease. Stripping Tampa due to hurricane impact, Q4 actual portfolio RevPAR increased 5.8% vs prior year. Same-store portfolio vs 2019, RevPAR increased 3.8% (ADR up 7.9%, occupancy down 3%). Full-year 2024: RevPAR up 3.5% (6.1% occupancy increase, 2.5% rate decrease). Stripping Tampa, annual actual portfolio RevPAR up 3.9% vs 2023. Same-store vs 2019, RevPAR up 1.3% (ADR up 8.6%, occupancy down 6.8%).

• 2025 total revenue projected in range $183.4M-$188.2M (midpoint 2.1% increase over prior year). - Hotel EBITDA projected $48.8M-$49.6M (midpoint 5.2% increase over prior year). - Adjusted FFO projected $11.5M-$12.3M ($0.57-$0.61 per share, midpoint 16.4% increase vs prior year). - Full-year 2025 RevPAR forecasted 103%-105% of 2024 RevPAR.

• Hurricane Helene impact on Hotel Alba continuing through Q2 2025. - Legacy debt refinancing challenges leading to higher interest costs as they refinance loans from lower interest rate periods.

Q: Looking at guidance, revenue and EBITDA are higher but FFO looks to decline; color on FFO trajectory and refinancing impact.

A: Tony Domalski said interest costs creep up due to refinancing legacy loans with lower prior interest rates. Until refinances complete, interest costs will slowly plateau.

Q: On 8-K about stock trading below a dollar and reverse split.

A: Dave Folsom said they have 180 days to cure deficiency, which can be done via reverse split or stock price rising above dollar.

Q: Insurance recoveries for hotels with repairs like Hotel Alba and impact on FFO.

A: Scott Kucinski said guidance assumes normal operations with business interruption proceeds, and they've been calculating monthly, assuming fully made whole going forward.

Q: Thought on selling assets to unencumber and improve leverage.

A: Dave Folsom said they're always looking at options but currently focused on refinancing legacy mortgages to get best outcome from markets.